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Why Shares of Futu Holdings, UP Fintech Holding, and 9F Are All Rising Today

By Bram Berkowitz - Updated Feb 19, 2021 at 2:49PM

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The stock brokerages, which were founded in Hong Kong and China, are trading higher today on potential regulatory changes in China.

What happened

Shares of the stock brokers Futu Holdings (FUTU 5.55%)Up Fintech Holding (TIGR 5.51%), and 9F Inc. (JFU 9.53%) all rose Friday on favorable regulatory news.

The Hong Kong-based Futu Holdings saw its shares rise as much as 17.7% this morning. Meanwhile, UP Fintech Holding and 9F, which were both founded in China, saw their shares at one point today rise as much as 22.5% and 33.1%, respectively.

So what

All three of these companies have brokerage operations designed to facilitate funds in and out of China. Futu Holdings is a digital broker and wealth management platform that provides investing services for Hong Kong, U.S., and China Connect stocks.

UP Fintech Holding, which has been dubbed the "Robinhood of China," enables investors to trade on multiple exchanges around the world. And 9F is another fintech offering a range of financial products including lending, online wealth management, and payments services.

Line moving upward on chart.

Image source: Getty Images.

All three of these firms got a nice boost today when Bloomberg reported that China recently took steps that could make it easier for Chinese citizens to invest in companies abroad.

The agency in China that oversees foreign exchange market activities announced it will run a study to examine if investors inside China could invest in securities and insurance in other countries.

Chinese citizens would still be subject to their $50,000 annual foreign exchange quota, but the move would be a big step considering the country currently prohibits individuals from making direct offshore investments with that quota. China may also consider removing the quota limit for citizens who participate in stock incentive programs of offshore-listed firms.

Now what

China is becoming increasingly open to easing foreign trading restrictions, as it seeks to attract more foreign capital.

The easing of restrictions could be a huge opportunity for Futu, UP Fintech, and 9F because trading in China is not as widespread as in the U.S., leaving lots of room for growth.

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Stocks Mentioned

UP Fintech Holding Limited Stock Quote
UP Fintech Holding Limited
TIGR
$4.02 (5.51%) $0.21
Futu Holdings Limited Stock Quote
Futu Holdings Limited
FUTU
$33.47 (5.55%) $1.76
9F Inc. Stock Quote
9F Inc.
JFU
$1.04 (9.53%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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